Momentum holds $150mln second close for real estate fund

Momentum Global Investment Management has held a $150 million second close for its Africa Real Estate Fund, having successfully garnered an additional $103 million in investor commitments since January this year. The fund will target opportunities in the retail, commercial and light industrial sectors across sub-Saharan Africa, ex South Africa.

According to the company, the eight-year fund, which has set a cap of $250 million for its planned final close in 2016, has a net IRR performance target of 18-20%. The fund will charge investors a 1.75% management fee, with a 20% performance fee over a 10% hurdle.

David Lashbrook, Momentum’s Head of Africa Real Estate indicated that the fund has a growing pipeline of opportunities it is considering. “We are currently working on the mitigation of key development risks on several projects so they can be presented for approval.” he said. “We believe that derisking projects before transferring them into the Fund will help it to achieve the minimum 18% return target over its eight year life.”

Strong economic growth rates, expanding populations and increasing levels of urbanization are continuing to drive demand for retail, office and industrial property across sub-Saharan Africa. South African real estate company Eris Property Group will be the fund’s development partner on approved projects.

“We are currently reviewing projects in Mauritius, Ghana, Mozambique, Nigeria, Rwanda and Zambia, all of which present tremendous opportunities for our investors and the local communities in which they are based,” commented Warren Schulze, Eris Property Group CEO. “Our investment pipeline includes more than a dozen projects and we expect to commit funds to at least two of these projects prior to the end of 2015.”